Zografakis v McCarthy

Advance Commercial Finance Ltd v Aarons (1996) 7 BPR 14,523 Bushwall Properties Ltd v Vortex Ltd [1975] 1 WLR 1649 Carpenter v McGrath (1996) 40 NSWLR 39 Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 468 Concut Pty Ltd v Worrell (2000) 75 ALJR 312 Degmam Pty Ltd (in liq) v Wright [1983] 2 NSWLR 601 CASES CITED : Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 15,189 Jampco Pty Ltd v Cameron (No 2) (1985) 3 NSWLR 391 Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117 Wallace-Smith v Thiess Infraco (Swanston) Pty Ltd (2005) 218 ALR 1 Peter Butt, The Standard Contract for Sale of Land in New South Wales (2nd ed 1998) [9.74], [9.148], [9.185], [9.192] McGregor on Damages (17th ed 2003) 22-005 - 22-009 Standard Contract for the Sale of Land - 2000 ed, cls 9.1, 9.3

Nick Zografakis (P1) PARTIES : Aida Hatton-Ward (P2) Marion Alice McCarthy (D)

COUNSEL : A L Hill then K Harrison (S) (Ps) R K Newton (D)

SOLICITORS : Kenneth Harrison (Ps) Brown and Partners (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5528/05 NICK ZOGRAFAKIS & ANOR v MARION ALICE McCARTHY JUDGMENT 1 HIS HONOUR: These proceedings arise from a failed contract for the sale of land ("the contract"). The contract was for the sale by the plaintiffs to the defendant of a strata title property at 1/28 Carr St Coogee ("the property"). The defendant failed to complete and the plaintiffs terminated the contract. The defendant concedes that the plaintiffs were entitled to do so. The only question for determination in these proceedings is the quantum of the compensation that the defendant is liable to pay to the plaintiffs. Facts 2 The relevant facts are not really in dispute. The plaintiffs put the property up for auction on 30 March 2005 through Laing and Simmons, estate agents ("the agents"). On that day, shortly before the time fixed for the auction, the plaintiffs and the defendant exchanged counterparts of the contract. A deposit of $60,000 (five percent of the contract price) was paid. The completion date specified by the contract was three months after the contract date, ie, 30 June 2005. 3 The contract was in the form of the Standard Contract for the Sale of Land - 2000 ed. Clause 9 was as follows: " Purchaser's default

If the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect, the vendor can terminate by serving a notice. After the termination the vendor can -

9.1 keep or recover the deposit (to a maximum of 10% of the price);

9.2 hold any other money paid by the purchaser under this contract as security for anything recoverable under this clause - 9.2.1 for 12 months after the termination ; or 9.2.2 if the vendor commences proceedings under this clause within 12 months, until those proceedings are concluded; and

9.3 sue the purchaser either - 9.3.1 where the vendor has resold the property under a Contract made within 12 months after the termination, to recover - * the deficiency on resale (with credit for any of the deposit kept or recovered and after allowance for any capital gains tax or goods and services tax payable on anything recovered under this clause); and

• the reasonable costs and expenses arising out of the purchaser's non-compliance with this contract or the notice and of resale and any attempted resale; or

The contract also contained the following special condition: " Interest on Unpaid Moneys

36.1 If the Purchaser completes this contract but does not do so on or before the completion date, then on completion: 36.1.1 The Purchaser must pay the Vendor interest on:

36.1.1.1 The balance of the price; and 36.1.1.2 Any other amount payable by the Purchaser to the Vendor under this contract. From but excluding the completion date to and including the date of actual completion at the rate of 12% per annum.

36.2 Payment of interest in accordance with this Clause is an essential term of this contract.

36.3 The Purchaser need not pay interest under this Clause for any period that the Purchaser's failure to complete is caused solely by the Vendor." 4 From mid-May 2005, the plaintiffs were asserting an intention to terminate the contract. On 21 June 2005, the plaintiffs indicated to the defendant that they had arranged to move out of the property to be able to give the defendant vacant possession on completion and gave an extension of the time for settlement until 20 July 2005. On 24 June 2005 the plaintiffs entered into a Residential Tenancy Agreement of an alternative residence for the term of six months. After serving but not proceeding on two earlier notices to complete, the plaintiffs served a notice to complete on the defendant appointing 2pm on 10 August 2005 as the time for completion. The defendant did not complete at that time. On 15 August 2005 the plaintiffs gave notice terminating the contract. 5 The plaintiffs commenced these proceedings by statement of claim filed on 24 October 2005. The prayers of the statement of claim relevantly claimed declarations "that the plaintiffs are entitled to terminate the Contract" (prayer 1); "that the defendant forfeit the deposit to the plaintiffs" (prayer 2) and that the plaintiffs "are entitled to retain the deposit" (prayer 3). By prayer 4 the plaintiffs claim an award of damages against the defendant arising from the breach of the provisions of the contract by the defendant's failure to complete, "thereby causing loss and damage to the plaintiffs". The plaintiffs in the particulars appended to par 12 of the statement of claim particularised among the loss and damage suffered by them the loss occasioned to the plaintiffs on the resale of the property. At that time, the property had not been resold and the deposit was still held by the agents as stakeholders. 6 On 27 October 2005 Gzell J by consent made orders including the three declarations as sought in the statement of claim. The plaintiffs thereupon procured the payment to them by the agents of the deposit, which appears to have been paid to them on 1 November 2005. On 31 October 2005 the plaintiffs exchanged contracts for the sale of the property to an alternative purchaser for the price of $1,100,000, which contract was settled on 12 December 2005. The plaintiffs thereafter bought a new house the purchase of which was completed on 1 March 2006 and the plaintiffs moved into the new house thereafter. As they did not have a new house on 24 December 2005, they held over under the residential lease agreement of 24 June 2005 and paid rent under that agreement up to 1 April 2006, by which time they had moved into the new house. 7 The "damages" which the plaintiffs claim to recover are set out as follows in their written submissions (as subsequently modified): Damages on re-sale of property $100,000.00 Interest pursuant to Special Condition 36 $46,947.88 Costs of resale $1,153.40 Lost auction and advertising fees $15,106.00 Legal fees in relation to aborted conveyance $10,665.70 Extra rent paid $4,615.00 Extra removal fees paid $4,184.36 Interest pursuant to s 100 of the Civil Procedure Act $8,977.44 Interest on legal fees paid $1,066.34

The plaintiffs contend that there is no difference between what they are entitled to recover under cl 9.3.1 and under cl 9.3.2 and that they are entitled to recover each of the abovementioned items under either provision. 8 The defendant contends that, in the circumstances, the plaintiff has elected to proceed under cl 9.3.1 and is not entitled to recover under cl 9.3.2. She concedes that the plaintiff is entitled to recover items properly recoverable under the provisions of cl 9.3.1. The defendant concedes her liability to pay the plaintiffs $100,000 as the deficiency on resale less the deposit of $60,000 which the plaintiffs have retained. She denies any liability for interest on the $100,000 or the balance of it over the $60,000 retained. She denies liability for the lost auction fees. She denies liability at least in part for the legal fees. She denies liability for the Special Condition 36 interest and for the rent and removal fees. The law 9 One of the principal issues of law raised by the defendant is whether the plaintiffs have made an election between their rights under cl 9.3.1 and their rights under cl 9.3.2 of the contract and whether, having elected to sue under cl 9.3.1, they are precluded from recovering any common law damages under cl 9.3.2 that cannot be recovered under cl 9.3.1. 10 What is recoverable under under cl 9.3.1 is spelt out in the clause. The principal item, if the property be resold, is the deficiency on resale. The corresponding head of common law damages is the difference between the contract price and the market value of the subject land and such other damages as may usually arise from the breach: see Peter Butt, The Standard Contract for Sale of Land in New South Wales (2nd ed 1998) [9.192], [9.185]; see also McGregor on Damages (17th ed 2003) 22-005 - 22-009. 11 The locus classicus as to the relationship between the alternative regimes prescribed by clauses such as cl 9.3 is in the judgment of Powell J in Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117. That case dealt with cl 16 of an earlier standard form of contract but it does not seem to me that any difference in principle arises from the difference in the clauses and the parties agree in contending that there is no relevant difference. His Honour at 135 said of the clause that the rights it provided were "intended to be cumulative upon, rather than in substitution for, the plaintiffs' ordinary rights at common law". It therefore followed that "except to the extent to which those rights are inconsistent with the rights provided by the common law, and except to the extent that there has been a completed and irrevocable exercise of one or other of those inconsistent rights, there [could] be no room for the operation of 'election' …" 12 Although Powell J does not, of course, refer to these decisions, this statement reflects the general principle articulated by Gleeson CJ, Gaudron and Gummow JJ in Concut Pty Ltd v Worrell (2000) 75 ALJR 312 at [23]. Their Honours drew particular attention in the context of termination provisions to Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 468 and specifically the statement by Hope JA at 487 that "clear words are needed to rebut the presumption that a contracting party does not intend to abandon any remedies for breach of the contract arising by operation of law". In Concut ibid their Honours said that "an express provision for termination for breach in certain circumstances may be regarded as designed to augment rather than to restrict or remove the rights at common law which a party otherwise would have had on breach". And see the decision of the Full Court of the Federal Court in Wallace-Smith v Thiess Infraco (Swanston) Pty Ltd (2005) 218 ALR 1. 13 Taylor has continued to be regarded as good law in New South Wales. It is to be noted that it stipulates not one, but two preconditions for the operation of the doctrine of election. The first is that the two rights or bodies of rights must be inconsistent. The second is that there must have "been a completed and irrevocable exercise of one or other of those inconsistent rights". 14 It was suggested at one stage in this case that the forfeiture of the deposit and its recovery from the agent constituted an election. However, this is clearly not so. Clause 9.1 and cl 9.3 are conjoined by "and". The rights in cl 9.3 are clearly cumulative upon the rights in cl 9.1. It is between cl 9.3.1 and cl 9.3.2 that the disjunction occurs. As Young J (as his Honour then was) said in Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 15,189 at 15,198: "It would seem to me that as a pure matter of reading the clause, the word "and" after 9.2.2 shows that 9.1, 9.2 and 9.3 confer cumulative rights and not alternative rights. Indeed, it has been said in analogous cases that there is no room for the doctrine of election within this sort of clause; see for instance Taylor v Raglan Development Pty Ltd [1981] 2 NSWLR 117, 135 and Tang v Chong (1988) 4 BPR 9507, 9510. Accordingly, I reject this submission." 15 The question of what constituted an election between cl 9.3.1 rights and cl 9.3.2 rights was dealt with by Young J in Jampco Pty Ltd v Cameron (No 2) (1985) 3 NSWLR 391. In that case the plaintiff in the statement of claim claimed "Damages for breach of contract" but particularised as its loss and damage "Loss on resale of property $105,000". His Honour said at 392 - 393: "As Associate Professor Butt says in his Standard Contract for Sale of Land in New South Wales (1985) at 488, it is clear from the scheme of this condition: "… that the vendor is given the option, after terminating the contract, of either suing for damages in accordance with general law principles… or reselling the property as owner and claiming as liquidated damages any deficiency on resale and expenses of resale and the purchaser's default. …" In Tiplady v Gold Coast Carlton Pty Ltd (1984) 54 ALR 337 at 375, Fitzgerald J said: "… Although it commonly seems to be overlooked, it is essential to maintain the distinction." In Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117 at 135, Powell J pointed out that there is no room for the operation of any doctrine of election upon these two rights, at least until there has been a completed and irrevocable exercise of one or other of them. But, as Associate Professor Butt points out (at 533-534), the time must come when the vendor has to choose which course to pursue: "… and having elected to pursue one right he is not permitted later to resile from his election in order to choose the other if it eventuates that he has elected for the least advantageous course. Whether the vendor has made an election to pursue one right or the other will be a question of fact …." …… In order to determine which course a vendor has chosen the court must look at the conduct of the parties, both before the termination and subsequently: see eg Kinleyside v Irwin [1961] WAR 169 at 171; Coates v Sarich [1964] WAR 2 at 12, and cases there cited. There is precious little material in this case to assist the Court, there is nothing of any relevance in the notice to complete or the notice of termination or in the dealings with the parties after termination. Indeed all there is is the statement of claim of which I have already set out the material paragraphs.

In my view the statement of claim tends towards a claim for breach of contract rather than a claim under the contract for loss on a resale except for the appearance of that phrase in the particulars of par 8. The amended particulars of damage are also more consistent with a claim for breach of contract than for a claim under the contract. In my view, although there is scant material on the matter, it has elected for breach of contract damages."

See now Butt's 2nd edition cited in [10] above [9.74], [9.148]. 16 On this subject, Young J said in the Eighth SRJ case supra at 15,199: "Although the pleadings do not make it completely clear, the words 'alternatively damages' to my mind pick up either damages under the general law or 'damages for breach of contract' referred to in cl 9.3.1. Although in fact the contract with the Tolls was made within 12 months, the pleadings and the way the case was run by Mr Alexis, do not suggest the vendor was claiming a liquidated sum on a deficiency in accordance with cl 9.3.2. As Fitzgerald J said in Tiplady v Gold Coast Carlton Pty Ltd (1984) 3 FCR 426, 465, the distinction is an essential one. Furthermore it is clear that once a vendor has made a choice as to which of the remedies to pursue then that is an election against the other: Tiplady's case and Jampco Pty Ltd v Cameron (No 2) fulIy reported in (1985) NSW ConvR 55-275, an abbreviated report also appearing as (1985) 3 NSWLR 391.

The difference between the two methods is that where there is a deficiency on a resale, one has liquidated damages and one takes the difference between the contract price and the resale price and makes certain adjustments which are authorised by the authorities. On the other hand, where there are damages at common law or under the contract (probably this means the same thing), one takes the difference between the contract price and the value of the land as at the date of the breach and adds on consequential damages, and if necessary, interest, giving credit for the deposit. If one looks at the Tiplady case, both before Fitzgerald J and on appeal to the Full Court (1984) 8 FCR 438, one can glean that there seems to be very little difference between what, under the general law, will be consequential damages and what, under the contract, will be the 'costs and expenses of resale'". 17 From the above authority the following propositions may be derived:

(1) In a clause such as cl 9.3, the election, if it occurs, is between the totality of the common law rights on the one hand and on the other hand the totality of the special collection of alternative rights stipulated by the contract: one does not look at a particular right within each bundle to see if it is inconsistent with a particular right stipulated in the other bundle.

(2) One looks at the whole of the conduct of the parties and the whole of the circumstances to determine if there has been an election.

(3) In this regard, the form and conduct of the litigation are of particular significance. The claimed items 18 I turn to the items actually claimed under the heads which appear below. These items will be dealt with first on the basis that they are claimed under cl 9.3.1, since the defendant does not dispute that the plaintiffs are entitled to claim on that basis. The figures in brackets in the headings relating to the individual claims below are inserted to identify the amounts as claimed by the plaintiffs and are not necessarily the figures that will be recovered by the plaintiffs if they succeed upon those claims. (1) The plaintiffs claim the $100,000 difference in purchase prices less the $60,000 deposit retained [$40,000] 19 The defendant does not deny the plaintiffs' entitlement to make and succeed on this claim. (2) Interest under Special Condition 36 [$46,947.88] 20 The defendant denies liability for this. She submits that on termination of the contract any right to claim interest under Special Condition 36 ceased. Furthermore, she says that interest under this provision is not specified in cl 9.3.1. She says that the deficiency that can be claimed under cl 9.3.1 is only the difference between the purchase price under the contract and the purchase price on resale. The plaintiffs submit that settlement could have taken place up to the date of termination on 15 August 2005 and that, the right to interest to that date having been vested at termination, the plaintiffs continue entitled to recover that interest. In Advance Commercial Finance Ltd v Aarons (1996) 7 BPR 14,523 Cohen J said at 14,531: "Settlement could have taken place up to the date of termination on 25th November, 1991. Interest would have run up to that date and would have been added to the original contract price. Interest is therefore payable up to the date of termination. This was the view expressed by Powell J in Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117 at 136. In that case, the agreement for interest was separate from the original contract for sale, but was to be paid up to the date of completion and it was said that it continued to run even though the contract was terminated upon default." 21 In relation to the defendant's submission, it is to be borne in mind that what may be recovered under cl 9.3.1 is the "deficiency on resale", not the difference between the contract price and the price on resale. What the plaintiffs would have received on completion had the contract in fact been completed on the day on which it was in fact terminated would have been the balance of the purchase price together with the Special Condition 36 interest. In my view, therefore, the Special Condition 36 interest as at the date of termination was included in what may be recovered under the rubric "deficiency on re-sale", to employ the terminology of cl 9.3.1. This view receives some support from what was said by Clarke JA in Carpenter v McGrath (1996) 40 NSWLR 39 at 46: "The loss claimed in this case would, arguably, have been claimable only if the respondents had sought to recover a deficiency on re-sale. If that had occurred the respondents may have been entitled to treat the purchase price as constituted both by the amount shown in the contract and the interest payable under cl 24(b) for the purposes of determining the deficiency on re-sale. That only means that, for the purposes of calculating the purchase price payable under the contract, it is permissible to treat the interest as part of the price payable."

In those circumstances, the Special Condition 36 interest is to be included in the deficiency recoverable under cl 9.3.1, which the defendant herself contends is the appropriate criterion for recovery against her. This sum will therefore be included in what is to be awarded to the plaintiffs. (3) Costs of resale [$1,153.40] 22 These were not originally claimed, but they were claimed at the heel of the hunt. They are specifically within cl 9.3.1. The defendant did not deny liability, but claimed a deduction of $150 odd for a mortgage discharge fee. However, this sum seems to me a valid item of costs and I decline to deduct it. (4) The lost auction and advertising fees [$15,106] 23 The criteria for the recovery of costs and expenses thrown away under cl 9.3.1 are, first, that they should be costs and expenses (rather than losses) and, secondly, that they should arise "out of the purchaser's non-compliance with this contract" or a notice under or relating to the contract and of resale or any attempted resale. 24 In my view, whilst an attempt could be made to characterise the wasted auction fees as a loss arising out of non-compliance with the contract, they cannot be characterised as costs and expenses arising out of non-compliance with the contract or a notice. They cannot therefore be recovered under cl 9.3.1. Although the plaintiffs did not originally claim the costs of the resale, they have now done so and that claim is dealt with in [22] above. (5) Legal fees in relation to the aborted conveyance [$10,665.70] 25 This is the amount of a bill of costs presented by solicitors for work related to the contract and proceedings under it. I am of the view that, insofar as the fees are for work done in the course of the entry into and the carrying out of the contract, they cannot be characterised as work done arising out of the purchaser's non-compliance under the contract or any notice. However, it is clear that quite early the defendant threatened not to comply with the contract and I am of the view that the costs of advice concerning and actions arising out of these threats could be characterised as costs and expenses arising out of the purchaser's non-compliance. It seems to me therefore that there should be a determination in due course, which it is not appropriate for the Court to make as part of its resolution of the trial issues, of what part of the solicitor's bill of $10,665.70 falls within this category. Traditionally this would have been determined by the direction of an inquiry before the Master (now an Associate Judge), but one would hope that this matter could after delivery of this judgment be resolved by agreement or by a simpler procedure such as a reference to a referee or a determination by an agreed conveyancing expert appointed for the purpose. (6) Extra rent [$4,615] 26 This claim was reduced to $4,615. This sum was made up as follows. No claim was made for rent payable during the original six month term of the lease, since that was entered into so that the plaintiffs could move out of the property to give vacant possession under the contract, which was still on foot on 24 June 2005, and not by reason of non-compliance with the contract. However, the plaintiffs' claim the rent paid during the holding over period from 24 December 2005 to 1 April 2006. They say that continuation of the letting during that period would have been unnecessary had the contract been complied with, because they would have been able by 24 December 2005 to have purchased a new house and moved into it. But they could not start looking for the new home until they had in hand the proceeds of sale of the property. The extra rent incurred should be regarded as a reasonable expense arising out of non-compliance with the contract and therefore recoverable under cl 9.3.1. The 13 weeks' rent amounts to $11,375. The claim as enunciated by the plaintiffs allows in the defendant's favour $520 per week (a total of $6,760) in respect of mortgage payments which the plaintiffs were no longer making during those 13 weeks. The balance claimed is $4,615. I find that that claim should be upheld. (7) Extra removal fees [$4,184.36] 27 As with the original six months rent, which the plaintiffs do not claim (in my view correctly), I am unable to see how the extra removal fees arose out of the purchaser's non-compliance with the contract. Had the purchaser complied with the contract, the plaintiffs would have had to move out of the house to afford vacant possession. Indeed, the evidence shows that they entered into the lease of residential premises and moved out of the house for this very purpose while the contract was still on foot. In those circumstances, the removal expenses could hardly be characterised as arising out of the purchaser's non-compliance. Equally, the plaintiffs would have in any event had a second set of removal expenses from the rented accommodation to their new house when purchased. Had the contract been complied with, they would have had two sets of removal expenses. I cannot see that they can recover either set of removal expenses under cl 9.3.1 (or for that matter at common law). (8) Interest 28 The plaintiffs claim interest on the various sums they are entitled to recover. The defendant resists the payment of interest, particularly upon the deficiency on resale, with or without the Special Condition 36 interest. The basis upon which they resist an award of interest is that if the plaintiffs are to be regarded as proceeding under cl 9.3.1, the only items which may be recovered are those specifically mentioned in cl 9.3.1, and that clause does not advert to interest under s 100 of the Civil Procedure Act 2005 ("the CPA"). 29 In my view, this contention is misconceived. The interest sought is sought under s 100, not under cl 9.3.1. That section provides for the inclusion of interest in the amount for which judgment is given in "proceedings for the recovery of money (including any debt or damages or the value of any goods)". Whether it be a claim for damages in the general law or for the recovery of moneys under cl 9.3.1, the relevant claim must be a claim for the recovery of money within the meaning of s 100. The fact that interest is not specified as one of the items of the claim within the contractual provision matters not. The claim remains a claim for the recovery of money and the jurisdiction under s 100 is enlivened in relation to that claim. There is no reason why the Court ought not exercise that jurisdiction to calculate an appropriate amount of interest and include it in the judgment upon that claim. Nor is there any reason that I can perceive why the Court ought not do so. I propose to include interest in the amount that will be awarded. Interest will also be calculated in respect of other claims which are successful on an appropriate basis and included in the sum for which judgment is ultimately given. 30 The defendant contends that in any event interest should not be allowed on the item of $46,947.88 which has been described as Special Condition 36 interest. It is, of course, the law that in general terms interest on interest is not allowed: CPA s 100(3)(a); Degmam Pty Ltd (in liq) v Wright [1983] 2 NSWLR 601. However, this sum is not awarded to the plaintiff as interest calculated upon some other item of the claim. It is awarded as an amount which would have been payable on completion of the contract on the date of termination, if completion had occurred on that day. It is recovered as part of the deficiency on resale: see [21] above. Interest may be awarded where the interest recovered is really part of the damages: Bushwall Properties Ltd v Vortex Ltd [1975] 1 WLR 1649. In the circumstances, it is appropriate to award s 100 interest upon this element as well as upon the sum which represents the difference in actual price less the amount of the retained deposit when refunded. 31 As to the rate at which interest should be allowed, the plaintiffs claim that it should be allowed at the rate of 12 percent being the rate specified in Special Condition 36, rather than at the rates specified in Schedule 5 to the Uniform Civil Procedure Rules 2005 that usually apply. The 12 percent rate should undoubtedly apply to the interest under item (2) which is avowedly awarded under the contractual term. However, although there is some force in the plaintiffs' submission, particularly insofar as it relates to the amount awarded for the deficiency on resale, I do not see sufficient reason to deviate from the ordinary course in respect of any other interest awarded and all interest will be calculated at Schedule 5 rates. Damages at common law 32 The only items on which the plaintiffs fail under cl 9.3.1 are the extra removal fees, the lost auction and advertising fees and the legal fees of $10,665.70, insofar as the latter relate to work on the failed first contract of sale as opposed to work relating to non-compliance with that contract. 33 So far as the extra removal fees are concerned, in my view these could not be recovered as damages at common law, as they lack causal connection with the breach of contract for the reasons already stated in relation to this claim as made under cl 9.3.1. 34 So far as the lost auction and advertising costs and legal costs of entering into the first contract are concerned, it may be that these would be recoverable at common law as consequential losses flowing from the breach of contract. Here, however, the question of election pursuant to the principles stated in [15] - [17] above arises. In this case, the question is in my view easily answered. In the particulars appended to par 12 of the statement of claim, the plaintiffs made their claim by reference to the loss occasioned to the plaintiffs on the resale of the property. They have thereafter continued to conduct the proceedings on the basis of a claim formulated in that way. They have made no submission for the recovery of common law damages calculated by reference to the difference between contract price and market value. Although it may be that the prompt resale of the property for $1,100,000 would provide evidence of market value, they have at no stage made any submission as to what the market value of the property was or formulated their case by reference to market value. In those circumstances, under the principles discussed above, they must be taken as having elected to pursue their body of rights under cl 9.3.1 and are not entitled to make any claim by reference to the body of rights provided for by cl 9.3.2. For that reason, they cannot recover the lost auction and advertising costs or costs of entering into the first contract under common law principles. Conclusions 35 The conclusions I have come to as to what the plaintiffs may recover, subject to any final submissions as to calculations of figures, may be summarised in tabular form as follows: No Claim Amount 1 Difference between contract price and resale price [$100,000] less deposit retained [$60,000] $40,000.00 2 Special Condition 36 interest from 1 July 2005 to 15 August 2005 when contract terminated $46,947.88 subject to this sum being justified by calculation 3 Costs of resale $1,153.40 4 Legal fees in relation to non-compliance with contract but not in relation to entering into or carrying out of contract $10,665.70 to be dissected to provide this figure 5 Extra rent paid $4,615.00

36 So far as interest is concerned, all amounts to be allowed as interest under s 100 of the CPA should be calculated at Schedule 5 rates. Interest on the first two items should be calculated from the date of termination of the contract to the date of judgment, giving credit for the $60,000 deposit when refunded. Interest on items 3 to 5 should be calculated from the date of payment of the respective sums until judgment. In the case of the extra rent, the date from which the calculation should commence should be the mid-point of the extra rental period, which ran from 24 December 2005 to 1 April 2006 and which I calculate as 10 February 2006. 37 I shall stand the matter over to deal with costs and submissions concerning the figures in [35] above and to see whether the dissection of the $10,665.70 for costs can be agreed or to discuss a quick and cheap method for its resolution.

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